Key terms (2.3.3)

Question 1

External causes for business failure definition

Answer 1

the factor outside the control of a business which might cause it to fail
e.g competition legislation customer taste and economic conditions

Question 2

Financial factors for business failure definition

Answer 2

factors which may contribute to a business running out of cash
e.g late payments inability to borrow

Question 3

Internal causes for business failure definition

Answer 3

factors which a business can control
e.g poor decision making loss of key staff

Question 4

Non financial factors for business failure definition

Answer 4

can come from inside or outside the business
e.g poor management external shockks

Question 5

Overtrading definition

Answer 5

the situation where a business does not have enough cash to support its production and sales usually because it is growing too fast